The answer to the title question depends on which destination is asking it.
Reno is unlike Las Vegas regardless of their shared DNA. Once upon a time 60 years ago, they were comparable as destinations, the twin capitals of legal casino gambling. Today, they’re as different as two cities can be.
For example, a year ago, the Legends Bay Casino opened in Sparks, a community adjacent to Reno. It was a stalled project that took 15 years to come to fruition and cost an estimated $130 million. Legends has 700 slot machines and 14 table games and, extrapolating from the monthly gaming revenue reports by the Nevada Gaming Control Board, Legends has generated about a $1 million a month since opening.
Legends is small potatoes by modern casino standards. It has meager restaurant offerings and no hotel. It relies on two national chains with 100-room hotels located nearby. The real draw is its next-door neighbor, the Outlets at Legends Shopping Mall, anchored by Scheels Sports, Lowes, and Target. Legends Bay is merely an added amenity to a shopping mall estimated to draw over two million visitors a year.
Fontainebleau Las Vegas is scheduled to open in December. Like its northern cohort, Fontainebleau has been a long time in the making. Work was begun in 2006. It was delayed by the Great Recession and continual financing issues. The property was bought and sold several times. Carl Ichan bought it in 2009 for $170 million and sold it in 2017 for $600 million. In 2021, the original owner repurchased it for $350 million. The cost of construction is estimated at $3.7 billion. The resort has 3,600 rooms, 36 restaurants, a nightclub, spa, and a 3,880-seat theater. It does not have home improvement, sporting goods, or department stores.
Fontainebleau will raise the bar of expectations for new casinos, forcing others to follow its lead. Las Vegas is a casino-resort trendsetter. Casinos around the world look to Sin City for ideas, inspiration, and models. The city has continued to demonstrate industry leadership with its move in major freestanding sports and entertainment complexes, billions of dollars in investment.
No one looks to Reno or Legends Bay for inspiration. But maybe they should.
While the Las Vegas casino industry was growing and expanding, Reno’s industry was shrinking. Downtown, once the Reno Strip, has become nearly a wasteland, devastated by Indian gaming and the spread of casinos across the country. With two major exceptions, the casinos in Reno have done what Legends did; they moved into the suburbs, surrounded with parking and located close to other retail offerings. If Reno is still comparable to Las Vegas in any sense, it is to the regional or neighborhood casino market.
Las Vegas has Station and Boyd casinos spread throughout the valley. They live off a combination of local and tourist trade. The essential element is the local market. Reno casinos, too, need nearby residential populations to survive.
One recent example of that is Jacobs Gaming. The company entered the Reno market with the purchase of the Gold Dust West Casino in 2001. The property had a small but solid business built around the residential community on the west side of Reno. For years, Jacobs appeared to be content to operate the casino, updating slot product, but not making any significant changes to the property. Its focus was on numerous other properties and ventures around the country.
Sometime around 2017, Jacobs switched its focus to Reno. It bought the Sands Regency, located three blocks east of the Gold Dust, then spent $300 million reimagining, rebranding, and remodeling the property. J Resorts made its debut in June.
Jacobs also started buying all the property between those two casinos, declaring its intent to build a district that would include retail, entertainment, and residential elements; Jacobs calls that area the Neon Line District. The company puts a billion-dollar price tag on the complete buildout. In the process of acquiring property, Jacobs purchased a number of former hotels and motels that once thrived on Highway 40, but had become rather seedy, and Jacobs used a bulldozer to make room for the larger vision.
Most recently, Jacobs put in a bid to buy the Bonanza Inn. The Bonanza is a 58-unit motel built in 1968 before Indian gaming, before gaming outside of Nevada, and before a new interstate would sweep away the traffic from 4th Street, the former highway. Jacobs will add the property to his Neon Line District, but with a twist. “We intend to make a strong bid to acquire the property in order to develop additional workforce housing, with a set aside for 10% affordable senior housing units,” CEO Jeff Jacobs said.
This move by Jacobs is one of the reasons that some communities should be looking to Reno for inspiration. Reno has had to reinvent itself since the spread of gaming took most of its customers into other jurisdictions. It has been a long and painful process. The number of casinos dropped significantly and the remaining casinos focused on local residents supplemented by tourism. The casinos themselves have had to downsize. The J Resort has only 520 slot machines, 2,000 less than the Sands Regency had in its heyday. With the Bonanza Inn, Jacobs is recognizing another ingredient that may become very important in the future, employee housing.
Employee housing is one way that companies are coping with the shortage of labor and increased payrolls exacerbated by the rising cost of affordable housing for workers. Tesla, the company that jump-started the new Reno, is building housing for its employees. Tesla employees are faced with rising rents in Reno and a long expensive commute to the factory. With housing located near the factory, Tesla will address both of those problems. The Oneida Tribe of New York has added housing for the employees of its Turning Stone Resort. Jacobs is on the leading edge of a trend that may reach to other casino jurisdictions.
Communities in Mississippi, Missouri, New Jersey, and Louisiana, among others, are facing the same issues that have plagued Reno: intense competition, increasing employee shortages, and rising labor costs. Those jurisdictions would be well served to study the Reno model. The Las Vegas Strip has few lessons for them. New York City, Chicago, and Dubai will find inspiration on the famous Strip.
